Blacklisting of whistleblowers feared widespread in UK

In its latest review Whistleblowing: Time for Change, UK whistleblowing charity Public Concern at Work (PCaW) found that the blacklisting of whistleblowers remains a very real problem in the UK.

Whistleblowers speaking out about everything from health and safety concerns to money laundering have reported their difficulty securing work after whistleblowing. The problem is far more advanced than the existence of a formal blacklist and is evident across different sectors (not merely construction and health). PCaW has heard of whistleblowers experiencing blacklisting through prejudice during application and interview processes, negative referencing and even evidence of a regulator holding files on whistleblowers.

PCaW spoke to Martin Woods who blew the whistle on the laundering of billions of dollars through Mexican money exchanges into Wachovia bank accounts. As a result of his disclosures, the US Justice Department charged Wachovia with the largest Bank Secrecy Act violation in history and fined the bank US$160 million in 2010. Woods was disciplined and suffered huge psychological distress as a result. But his story does not end there. After leaving Wachovia he applied for many jobs but was unsuccessful. Later he found out that the Financial Services Authority (now the Financial Conduct Authority) had internal conversations about whether in speaking about his experiences as a whistleblower, he might be critical of the FSA. They reasoned that it was likely that in speaking about his experience, if Martin had signed a confidentiality agreement with Wachovia, he would be in breach. Without confirmation of such an agreement, they recorded him as ‘non-routine’ in relation to his status as a ‘fit and proper person’. This meant it would be more difficult to obtain FSA approved status in future. The record became known to Martin three years later when he found employment and his prospective employer informed him that the process of seeking approval would take much longer than normal because he was ‘non-routine’. Woods then discovered the sequence of events via a subject access request under the Data Protection Act.

Martin Woods said:“Never in my wildest dreams did I believe that the regulator would blacklist me. It was my perception that the regulated were the cheats and I didn’t imagine that I would end up in this situation. For the FCA subsequently to say that logging information that poses a risk of adverse publicity in relation to any of the FSA/FCA’s functions seems both sensible and appropriate is beyond comprehension and I am determined to help PCaW to secure pre-employment protection for whistleblowers so that no-one else has to fight in the way that I have.”

Cathy James OBE, Chief Executive of PCaW said: “We know that blacklisting exists in many forms, yet while we see many workers struggle to find new employment, the government refuses to acknowledge this. They will only recognize blacklisting as a formal list. Martin’s case demonstrates that many kinds of records can be held that might affect a whistleblower’s ability to move on quickly to new work. Questioning someone’s professional status is possible via many professional bodies and regulators. Additionally prospective employers may be aware of the fact that an applicant is a whistleblower via industry whispers or because the whistleblower has been in the public eye. While piecemeal protection exists for job applicants in the NHS, it is vital that such a pernicious practice can be challenged by all whistleblowers as a matter of course. Further, blacklisting is so serious that it should be open to public scrutiny and fines.”

Blacklisting ruins careers and lives. This case should serve as a wake-up call to the government that the consequences of whistleblowing can continue long after the employment relationship ends. If we do not challenge this experience, the risks of raising the alarm will be perceived as too high and we will once again be facing a dangerous culture of silence.”

PCaW is calling on the government to enact pre-employment protection for whistleblowers across all sectors. This important protection will challenge prejudice against whistleblowers and ensure that what may already have been a difficult experience is not made more so through a gap in the law.

Public Concern at Work’s review Time for Change also highlights:
• The ongoing difficulties experienced by whistleblowers via multiple interviews with workers who have spoken up.
• Four out of five whistleblowers reporting negative final outcomes.
• Seeking advice at an early stage is the most effective action a whistleblower can take (positive outcomes doubled), however 70% of workers seek advice after they have blown the whistle.
• A small continuous drop in the number of individuals who say they would raise a concern about serious malpractice.
• Public Concern at Work is seeking urgent action from government to improve the practice of organisations by placing PCaW’s Code of Practice for whistleblowing arrangements on a statutory footing.

Cathy James OBE said: “Our review highlights an urgent need for action to change the outcomes for whistleblowers. For too long we have relied on brave individuals who rightly fear serious consequences for doing the right thing. More individuals should be made aware of their rights and access to support and organisations must improve how they encourage, support and protect staff who speak up. We cannot afford another public disaster because an organisation failed to ensure their staff could speak up and be heard.”

The FCA website states: We class an application as non-routine where the firm and/or candidate:

makes opposing statements

answers questions incorrectly, either knowingly or unknowingly

does not tell us certain information

we hold information on the candidate, which raises concerns around their fitness and propriety

we are concerned about an authorised firm’s systems and controls, especially around how they monitor the approved person”.

The FCA are permitted to take up to 90 days to approve applications, though they operate to a voluntary standard of 10 days for significant influencing functions.